Yes! You can use AI to fill out Empower 401(k) Loan Prepayment Request Form

People often assume they can simply mail a check to make an extra payment on their 401(k) loan. However, the instructions clearly state a 'Loan Prepayment Request Form' must accompany any such payment. Without this form, the payment may be rejected, delayed, or misapplied, leading to continued interest accrual and potential confusion. To avoid this, always download the specific form from your online account or request it from the provider before sending any funds.

A common error is believing that once a prepayment or final payoff check is sent, automatic payroll deductions will stop immediately. The form states that loan payments 'will continue to be deducted,' implying a separate process is needed to halt them. This can result in overpayment and the hassle of requesting a refund. To prevent this, after confirming your loan is paid in full, you must explicitly contact your HR/payroll department or the 401(k) provider to stop the automatic deductions.

Individuals might save a copy of the form for future use or find one through a general internet search. Financial institutions frequently update their forms, and using an old version can lead to processing delays or rejection because it may lack required fields or have outdated information. Always obtain the most current 'Loan Prepayment Request Form' directly from your official 401(k) online portal or by calling the provider each time you plan to make a prepayment.

Loan balances accrue interest daily, so the amount on your last statement is likely already outdated. Sending an incorrect amount will not close the loan, leaving a small balance that continues to accrue interest and may incur fees. To avoid this, you must request an official 'payoff quote' from the provider, which is valid for a specific period and guarantees your payment will cover all outstanding principal and interest.

After mailing a check and form, many people assume the payment was received and correctly applied without checking. If the payment is lost or there's a processing error, interest continues to accrue on the original balance. It is crucial to log into your 401(k) account or call the provider a week or two after sending the payment to confirm it was received and applied correctly to your loan principal.

When filling out the 'Loan Prepayment Request Form' by hand, people often write illegibly or forget to fill in critical fields like their account number, loan number, or the prepayment amount. This is a primary cause of processing rejections, forcing the provider to return the form and payment, which delays the prepayment. If the form is a non-fillable PDF, AI-powered tools like Instafill.ai can convert it into a fillable version and help auto-populate fields with correct, validated information to prevent such errors.

The 'Loan Prepayment Request Form' will specify the exact mailing address for prepayments, which is often a dedicated P.O. Box. A common mistake is to send the check to a general corporate address found online, which can cause significant delays or result in the check being lost internally. To prevent this, carefully read the instructions on the form and use only the address provided for loan payments.

Some loan agreements allow prepayments to be applied either directly to the principal or to cover future scheduled payments. If the form has an option and the borrower doesn't specify their choice, the provider will use a default method that may not align with the borrower's goal of paying the loan off faster. Always check the form for an option to apply the payment to 'principal only' and select it if your goal is to reduce the loan balance and total interest paid.

The instructions mention logging into the account to 'obtain' the form, not necessarily to make the payment directly online. Users might mistakenly navigate the website looking for a simple 'make a payment' button for their loan, which may not exist or may not be intended for prepayments. The correct procedure is to first secure the 'Loan Prepayment Request Form' and follow the submission instructions detailed on that document.